PC sales set to grow, with big push from Asia-Pacific

Worldwide PC sales are expected to reach 40.15 million units in the fourth quarter of this year.

Worldwide PC sales are expected to reach 40.15 million units in the fourth quarter of this year.

(SCMP.com) - This healthy prognosis was made by research firm International Data Corp (IDC), despite sluggish demand in the United States.

"Although it is clear consumer demand in the United States is weakening, buying in other regions remains strong," said Loren Loverde, director of IDC's worldwide PC tracker programme.

Revised IDC estimates for the Asia-Pacific market, excluding Japan, show fourth-quarter PC shipment growth of 33.4 per cent year-on-year.

According to IDC, worldwide PC sales in the fourth quarter represent growth of 19.6 per cent over the same period of last year, and sequential growth of 19.8 per cent from the third quarter of this year.

"PCs remain the dominant means of accessing the Internet, and a lot of people out there are still buying PCs to get online. The portables segment is also strong in all regions, boosting sales in both consumer and commercial markets," Ms Loverde said.

The Asia-Pacific market (excluding Japan) continues to grow at an accelerated pace, with year-on-year growth of 42.7 per cent in the third quarter, beating expectations by 6.5 percentage points, according to IDC. The IT market specialist said continued success of local vendors, growth of affinity distribution models, a thriving portable market and strong consumer demand were driving the Asia-Pacific market.

IDC said it revised fourth-quarter growth projections for Japan upwards to 29.4 per cent year-on-year, following a slower-than-expected third quarter.

It said strong consumer demand from repeat and first-time buyers, and recovering business investments, were driving the Japanese market. In the US, consumer spending was strong through the third quarter, but early warnings from retail and direct channels suggested a weaker consumer market in the fourth quarter.

IDC expected consumer demand in the US to remain depressed for two to three quarters before accelerating again.

Roger Kay, manager of desktop PC hardware at IDC, said: "Even though the fourth-quarter consumer market is weak, the US commercial market is slowly warming.

"This up-tick is primarily due to two factors - the Windows 2000 upgrade cycle is finally beginning to kick in and PCs bought early [1997 and 1998] for millennium compliance are reaching the end of their life cycle."

PC vendors well-positioned globally - and particularly strong in the Asia-Pacific market, portable systems, and consumer segments - include Compaq Computer, Dell Computer, Hewlett-Packard, IBM and Toshiba.

IDC's revised forecast for the US market called for fourth-quarter total unit growth of 15.8 per cent year-on-year and 11 per cent sequential growth from the third quarter of this year.

In western Europe, consumer sales appeared to be healthy, while the corporate segment was to blame for lowered estimates.

The slower-than-expected uptake of business IT investment in the second half of this year in western Europe led IDC to lower fourth-quarter expectations to 15.1 per cent year-on-year from nearly 19 per cent.

IDC expects portable PC shipments to grow almost 32 per cent worldwide in the fourth quarter.

The market for portable PCs was particularly strong in the third quarter, with worldwide shipments increasing more than 33 per cent year-on-year, IDC said.

The US, western Europe and Asia-Pacific all outperformed expectations.

"Portables appear to be picking up steam, as the advantages of mobility gain ground over resources for applications," Mr Kay said.

Although demand for PCs worldwide remained buoyant this year, IDC said its latest estimates for next year saw this market declining. Revised IDC forecasts called for total PC shipment growth to slip to 16.6 per cent worldwide for next year, down from 18.8 per cent this year. Worldwide growth was expected to slow further in the longer term as business and consumer market saturation increased and growth in emerging markets moderated, IDC said.

According to a recent study, PC manufacturers hope appearance will increase sales. Colour and size will be critical in determining the success of a PC design.

"As demonstrated by the success of Apple's iMac, users seem receptive to new desktop PC designs.

"Buyers now realise a desktop PC may be defined more broadly than previously thought, and they appear to be open to buying sometimes vastly different kinds of desktop designs," Mr Kay said.

IDC found what appealed to consumers might not appeal to business buyers.

"Desktop PCs designed for the consumer market will need to pack a punch, while those for the corporate world will need to be understated and elegant," Mr Kay said.

IDC predicted small PCs which users could store when not in use would have broad appeal, as would flat monitors.

"We are at the start of major changes in desktop design.

"It is critical that vendors understand user preferences to plan winning products," Mr Kay said.